India VIX Slips 0.74% after RBI Holds Repo Rate, as Benchmark Indices End Higher  

Mumbai, Aug 5: India’s volatility gauge, India VIX, ended Wednesday’s trading session lower as markets remained steady following the Reserve Bank of India’s (RBI) monetary policy decision. The index closed at 12.00, down 0.09 points (0.74%), reflecting lower implied volatility during the day’s trade after the central bank maintained the repo rate at 5.25%, in line with market expectations. 

The volatility index traded within a broad intraday range of 10.80–12.67, after opening at 12.19, matching the previous closing level of 12.19. Despite witnessing some intraday fluctuations, India VIX finished the session near the 12 mark, signalling that near-term volatility expectations remained contained as domestic equities advanced. 

India VIX Ends at 12.00 as RBI’s 5.25% Repo Decision Keeps Volatility in Check 

India VIX moderated through Wednesday’s session after the Reserve Bank of India left the repo rate unchanged at 5.25%, a move that was widely anticipated by market participants. With the policy announcement delivering no major surprises, implied market volatility softened over the course of the day. 

The decline in India VIX reflected reduced pricing of short-term market fluctuations following the monetary policy outcome. The index settled at 12.00, compared with the previous close of 12.19, after touching an intraday high of 12.67 and a low of 10.80. The easing in the volatility gauge came as broader markets absorbed the policy decision without any abrupt movement, allowing volatility expectations to remain relatively stable throughout the trading session. 

Sensex Gains Over 600 Points While India VIX Falls Below 12.20 

Domestic equity markets closed firmly higher on Wednesday, with the Sensex rising by more than 600 points and the Nifty trading above 24,650, while India VIX moved lower during the same session. 

The combination of advancing benchmark indices and a softer volatility index reflected calmer derivatives pricing during the day’s trade. As benchmark indices strengthened following the RBI policy announcement, demand for downside protection in the options market eased, contributing to the decline in India VIX. The movement underscored a session where equity markets remained resilient despite global macroeconomic developments continuing to stay in focus. 

Technical Levels Show Neutral Trend with Resistance At 12.68 

India VIX continued to maintain a Neutral technical rating across the daily timeframe at the close of Wednesday’s session. Technical indicators, moving averages and crossover signals remained unavailable, while pivot levels provided the key reference points for the next trading session. 

Under the Classic Pivot calculation, the primary pivot point stood at 12.05, with resistance levels placed at 12.68, 13.17, and 13.80, while support levels were identified at 11.56, 10.93, and 10.44. Fibonacci pivot calculations showed resistance levels at 12.48, 12.74, and 13.17, with supports at 11.62, 11.36, and 10.93. Meanwhile, Camarilla pivot levels placed immediate resistance at 12.29, followed by 12.40 and 12.50, while support levels were marked at 12.09, 11.98, and 11.88. 

August History Shows Positive Average Returns Of 10.52% 

Historical seasonality data indicates that August has generally been a favourable month for India VIX over the past 18 years. According to the available seasonal analysis, the volatility index has recorded positive returns in 13 out of 18 years during August. 

The highest positive monthly change recorded for August was 68.84% in 2015, while the average positive return stands at 16.88%. On the downside, the steepest August decline was 11.26% in 2016, with the average negative return at 6.01%. Overall, India VIX has posted an average August change of 10.52%, highlighting the month’s historical tendency to record positive movement despite occasional declines. 

Global Developments Continue to Shape Volatility Expectations 

Although India VIX ended Wednesday’s session lower, market participants continued monitoring several domestic and international developments that could influence volatility levels in subsequent trading sessions. 

Among the factors remaining under watch were ongoing US-Iran geopolitical tensions, movements in crude oil prices, trends in global bond yields, incoming US economic data, and the future monetary policy trajectory of the Reserve Bank of India. While none of these developments triggered a sharp increase in volatility during Wednesday’s session, they continued to remain part of the broader macroeconomic backdrop being tracked across financial markets. 

India VIX Holds Above 52-Week Low Despite Daily Decline 

Despite ending lower on Wednesday, India VIX continued to trade comfortably above its 52-week low of 8.72, while remaining well below its 52-week high of 28.90. The index closed at 12.00, with a year-to-date return of 26.48%, reflecting its performance since the beginning of the calendar year. 

The trading session saw India VIX open at 12.19, move between 10.80 and 12.67, before settling at 12.00 by the close. The closing level kept the volatility gauge within the lower half of its annual trading range, while remaining consistent with the relatively subdued volatility observed after the RBI’s policy announcement. 

India VIX closed at 12.00, down 0.74%, after the Reserve Bank of India maintained the repo rate at 5.25%. The volatility gauge eased as benchmark indices advanced, while historical data continued to show August as a month that has delivered positive returns in 13 of the past 18 years. Market participants will continue tracking domestic policy developments and global macroeconomic events that may influence volatility levels. 

Source 

• https://www.nseindia.com/reports-indices-historical-vix